Release Date: August 08, 2024
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
- Planet 13 Holdings Inc (PLNH, Financial) reported a significant 47% sequential increase in total retail revenues, reaching $27.4 million.
- The company successfully closed the acquisition of VidaCann, contributing $7.2 million to Q2 2024 revenue.
- The SuperStore generated $15.1 million, marking an 11% sequential improvement, driven by the new Dazed Consumption Lounge.
- Gross profit improved to $15.8 million in Q2 2024, with a gross margin increase to 50.1% from 45.8% in Q1.
- The company achieved a 10.3% adjusted EBITDA margin, generating $3.2 million of adjusted EBITDA in the quarter.
Negative Points
- There are concerns about weakening consumer demand in the second half of 2024 and early 2025, potentially impacting revenue growth.
- The Florida market is still not at the revenue per store level of leading competitors like Trulieve.
- The Nevada market is experiencing price compression and competition for local customers, affecting profitability.
- The company faces ongoing integration challenges with the VidaCann acquisition, including system and procedural adjustments.
- There is uncertainty regarding the timing and regulatory framework for potential recreational cannabis sales in Florida.
Q & A Highlights
Q: Could you discuss the initiatives that led to growth in Nevada and Illinois, particularly regarding the Superstore and Illinois neighborhood store?
A: Dennis Logan, CFO, explained that the growth was driven by better penetration of house brands, increased flower sales, and events at the Dazed Consumption Lounge, which sells 100% of their own products. The tattoo parlor also contributed by drawing in customers. In Illinois, they focused on pricing and promotions, and plan to introduce house brands to further drive growth. Robert Groesbeck, Co-CEO, added that events like FIGHT WEEK and live view events have been popular and will continue to expand.
Q: How much of the adjusted EBITDA margin improvement was due to the VidaCann acquisition in Florida versus other markets?
A: Dennis Logan, CFO, noted that Florida operations are in the 50% plus margin range, with Nevada margins at 52% to 55%. The improvement is due to more vertical integration and less reliance on wholesale revenue. The overall margin will depend on the success of wholesale growth and product mix.
Q: Can you provide more details on the Florida market performance and future expectations?
A: Dennis Logan, CFO, clarified that VidaCann generated $12.9 million in revenue, not $19 million. The Florida team has doubled revenue year-over-year by improving product quality and adding new products. They expect continued growth with new Planet 13 strains and expanded product offerings. The goal is to achieve 3% month-over-month growth per store.
Q: What is the outlook for Florida's cultivation and store expansion by the end of the year?
A: Dennis Logan, CFO, confirmed that they expect significant output increases by Q4 due to expanded cultivation capacity and yield improvements. They plan to have 32 stores by year-end, with further growth potential as they continue to expand their store network and product offerings.
Q: What are your thoughts on the potential for recreational cannabis sales in Florida if the ballot passes?
A: Robert Groesbeck, Co-CEO, expressed cautious optimism, noting that while passing the ballot would be beneficial, the legislative process could be slow. They are preparing to participate but maintain a conservative timeline, expecting changes to take time due to regulatory and legal processes.
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
